European healthcare stocks fell sharply on Wednesday as investors braced for potential tariffs on the pharmaceutical industry, a sector that had largely been spared from previous rounds of trade levies.
US President Donald Trump, who has dubbed the new wave of tariffs “Liberation Day,” is expected to announce fresh measures later in the day, raising concerns about their impact on global drugmakers.
Trump said last month that he planned to announce car tariffs “very shortly” and then “we’ll be announcing pharmaceuticals at some point in the not too distant [future] because we have to have pharmaceuticals.”
The STOXX 600 Healthcare index dropped 2.5% in early trading, reaching its lowest level since December.
The broader European market also came under pressure, with the benchmark STOXX 600 index declining by 0.9%.
“This might be a reaction to the tariff announcements expected today from the US administration, which this time could focus on the pharmaceutical sector,” an analyst said.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the losses reflected growing anxiety over the tariffs.
“It’s not surprising that pharma stocks have been caught up in this wave of nervousness,” Streeter said, adding that investors are on “tenterhooks” as the clock ticks down to what’s expected to be the biggest wave of tariffs on US trading partners.
It’s been dubbed Liberation Day by President Trump, but it’s more like entrapment day, with more countries set to be tangled up in a web of fresh duties.
Major pharmaceutical stocks slide due to fears of Trump tariffs
Shares of major European pharmaceutical companies were hit hard as fears over tariffs intensified.
Germany’s Bayer slumped 4.7%, while France’s Sanofi declined 3.3%. Swiss drugmakers Lonza and Novo Nordisk both lost around 2.7%.
Other major healthcare firms, including Novartis, Roche, and Merck, fell between 1.6% and 2.7%.
UK-based AstraZeneca, as well as Bavarian Nordic, GSK, and UCB, recorded losses between 2.5% and 3.7%.
Analysts warned that if Trump moves ahead with tariffs on the sector, pharmaceutical companies could face significant cost increases.
Many drugmakers manufacture key ingredients and components in overseas markets before assembling final products in the US
Industry lobbies for gradual tariff rollout
Until now, pharmaceuticals had been largely exempt from Trump’s aggressive trade measures.
However, reports indicate that the White House is preparing to impose duties on drug imports as part of its broader push to reduce the US trade deficit.
Industry executives are now urging the US government to implement any tariffs in phases, allowing companies time to shift production closer to their largest market.
Reuters reported on Tuesday that pharmaceutical lobbyists were in discussions with administration officials about delaying the levies.
While a formal announcement may not come immediately, sources familiar with the talks said the tariffs were likely unavoidable.
The uncertainty is already weighing on the sector, with companies warning that investment plans and product launches could be delayed.
“When you bring tariffs, it drives uncertainty, and when you’re uncertain, you pause,” Ester Baiget, CEO of Danish biotech firm Novonesis told CNBC on Tuesday.
“You pause innovation, you pause launches, you pause investments.”
With global markets on edge, investors will be closely watching Trump’s next move and its potential ripple effects on the pharmaceutical industry.
How tariffs could impact Novo Nordisk’s obesity and diabetes treatments
Denmark stands as one of Europe’s leading pharmaceutical and biotech hubs, home to major companies such as Novo Nordisk, the maker of Wegovy, and Bavarian Nordic, a vaccine producer—both of which have significant exposure to the US market.
Novo Nordisk’s chairman, Helge Lund, told CNBC last week that the company was not engaging in speculation ahead of Trump’s tariff announcement, instead emphasizing the importance of adaptability.
“It doesn’t make a lot of sense to speculate too much,” Lund said at the Danish pharmaceutical giant’s Annual General Meeting. “We are laser-focused on what we can impact.”
However, uncertainty lingers over how potential tariffs could affect US sales of Novo’s widely popular obesity and diabetes treatments, as well as the potential consequences for its American rival, Eli Lilly, which produces Zepbound.
Lund declined to comment on what proportion of the company’s weight-loss drug sales come from its US plants, instead highlighting Novo Nordisk’s “very significant” manufacturing presence in the country.
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